Needham & Company Reiterates Buy on Wix.com (WIX) Following DeviantArt Acquisition

Needham & Company reiterated a Buy rating and $73.00 price target on Wix.com (NASDAQ: WIX) following the company's announced acquisition of DeviantArt. The transaction was closed on Feb 22, 2017 and is not expected to materially impact the company's 1Q17 financials.

Analyst Kerry Rice commented, "We are encouraged by Wix's acquisition of DeviantArt (DA). We believe the acquisition provides Wix with exclusive access to DA's 40M registered users and 45M monthly unique visitors. With Wix's improving conversion rates, we believe these users could boost its premium subscribers, collections, and revenue. The acquisition also provides Wix with a highly engaged community that should lift engagement among its users. Finally, we believe upside optionality exists in the form of design and art license revenue. While for FY17 management expects the transaction to add $8M and $9M to revenue and collections, we believe investments in marketing could boost the incremental revenue in FY18. The marketing investment lowers FY17 free cash flow estimates, but the company could recoup at least a portion of this investment in FY18."

For an analyst ratings summary and ratings history on Wix.com click here. For more ratings news on Wix.com click here.

Shares of Wix.com closed at $62.75 yesterday.

You May Also Be Interested In

• Coherent (COHR) PT Raised to $420 at Needham
• Needham Starts Pulse Biosciences (PLSE) at Buy
• MiMedx Group (MDXG) Reiterated at Overweight by Cantor Fitzgerald: Wound Care Market Stable